Perfect Foresight vs. Time-Stepped Approach
#1
Hello,

Can someone explain the differences in which TIMES calculates activity cost (for example, fuel costs) in perfect foresight vs. time-stepped approaches?

I have a model which needs to make a vehicle investment, lifetime is 15 years. I understand in perfect foresight approach, it can calculate the 15 years of discounted fuel cost at the beginning of investment and annualize it (please correct me if I am wrong). How does it work in time-stepped approach? Suppose if I give a time step of 1 year, how does it calculate fuel cost? Will it just calculate every year as it decides?

Any insight would be appreciated.

Thanks,
Kalai
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Perfect Foresight vs. Time-Stepped Approach - by kramea - 20-03-2015, 11:19 AM

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